THE collapse of Borders in the UK may have sent shock waves through the bookselling world, but many in the industry are keen to distance themselves from the plight of their ailing rival.

Cut-price wares from supermarkets and the internet have already piled the pressure on book retailers and the recession – with the associated squeeze on consumers’ wallets – has undoubtedly added to the strain.

But in-administration Borders, with its attempt to take on the discounters while building a chain based on a US model of out-of-town superstores, may have been peculiarly vulnerable.

Malcolm Pinkerton, a senior analyst at retail consultancy Verdict, said Borders was too slow to react to the changes in consumer shopping habits and was further hampered by its “very expensive” store locations.

“Quite a lot of their problems were that they didn’t really move quickly enough,” he said.

“Their online offering was pretty poor and in store they gave up space to people like Starbucks and Paperchase.”

He said the chain tried to compete too aggressively with the supermarkets and failed to respond to what customers wanted from a specialist bookshop.

The book market has been transformed during Borders’ 12-year residence in the UK.

In 1997 the collapse of the net book agreement – which fixed the price at which retailers sold titles – ushered in an era of intense price competition in the market.

Suddenly big book chains could capitalise on their economies of scale, slashing the prices of the biggest-selling titles.

Supermarkets piled into the fray and US book giant Borders opened its first store on UK shores.

But as the internet became a greater part of people’s lives, it was online retailing that really benefited from the liberalisation of the UK book market as shoppers shifted spending away from bricks-and-mortar outlets.

According to figures from the Booksellers Association, large book chains have seen their market share by value diminish from 43% in 2004, to 36% last year.

Independent booksellers saw some reduction in the volume of sales over that time, but by value they retained around 10% of the market.

Meanwhile, the internet doubled its market share to 16% in the period, while supermarkets rose from 5% to nearly 10%.

Borders’ story is something of a cautionary tale for the industry.

Once seen as a hot new player on the high street, the chain has struggled in recent years.

Its American parent sold the UK and Ireland arm to buyout group Risk Capital Partners – headed by Channel 4 chairman Luke Johnson – in 2007.

Management, led by chief executive Philip Downer and finance director Mark Little, then bought the group back with financing from Valco Capital earlier this year.

Borders called in the administrators last month having suffered “severe” cash flow pressure as sales falls accelerated.

The firm – which had 45 branded Borders and Books Etc stores across the UK and employed 1,150 people before it collapsed – has launched closing down sales at all its shops.

Borders’ fate, while regretted by the industry, was also anticipated.

The firm had been struggling for months with dwindling stock levels as publishers implemented strict controls over book supplies following the management buyout.

Borders had to buy some stock with cash, while a number of credit insurers also cut their cover for the firm.

The publishers’ actions may muffle any repercussions on the high street from Borders’ collapse.

Its already decimated stock levels mean that closing down sales are unlikely to cause the sort of disturbance felt during Woolworths’ final weeks.

It remains to be seen what becomes of its store portfolio.

Sam Husein, chief executive of Foyles in London, said Borders had discounted so much in their attempts to take on the low-cost supermarkets that they “devalued the book”.

“The arithmetic doesn’t stack up because you can discount up to a point but you then have to work harder just to stand still,” he said.

“The larger book store should have been the book store where they provide the service and perhaps they lost that, perhaps they were trying to over-commoditise books.”

He said Foyles, which is “nicely into profit this year”, never really viewed Borders as a rival, but did regret its passing.

“We think it is rather sad at the moment looking across the road to see those signs saying 50% off,” he said.

Foyles, which now has five stores across the capital, had never tried to compete with the supermarkets, he said, focusing instead on good service and knowledgeable staff to maintain their specialist reputation.

Fellow independent bookshop boss James Daunt, who founded Daunt Books in London 20 years ago, said some small retailers had closed in recent years, but many are “doing fine”.

While independents were “horribly more expensive” than their chain store rivals, he said: “We are dramatically nicer places, otherwise nobody would shop here.”

He said that book-buying had grown over the years because of the decline in lending libraries and expansion in education and wealth.

“In our self-indulgent spoiled world we like going to cafes... there are an enormous number of things where we spend more money than we should simply because we enjoy it,” he added.

Daunt, which has five stores in London, saw sales rise “modestly” last year.

Revenues tailed off around the end of the year as the swirling financial crisis gripped the attention of the reading public and “the world was frankly a lot more interesting outside books and we wanted to read newspapers”.

This year he said people were shopping again and Christmas was “looking great”, helped by a strong selection of book releases.

Even Waterstone’s is keen to stress that it can provide consumers with something different.

A spokesman for the 320-store chain said: “The point is that Waterstone’s continues to differentiate itself from supermarkets and the internet by providing a very wide range of books in store.

“It continues to provide exciting new writing through its campaigns with publishers and plays an important role in maintaining the health and vibrancy of the book market in the UK.”

Borders’ collapse may be an isolated case, but that does not mean that this will be the last upheaval in the bookselling world.

Innovation is sweeping the bookselling market, as retailers look to take part in the next technological leap in reading – the eBook.

Waterstone’s now offers over 20,000 of the digital titles to download from its website as part of a deal with Sony, which produces eReaders.

Foyles meanwhile sells 57,000 eBooks, but it remains to be seen whether the eReaders will take off for those wanting to read fiction, or whether they will become more specialised, used for academic texts and news.

The digital titles are also no cheaper than other books as, unlike their physical equivalent, they are subject to VAT charges.

Mr Husein is upbeat about the changes.

“We see the eBook not as a threat to books, we simply see it as another way of reading,” he said.

And Mr Pinkerton said bricks- and-mortar booksellers would continue to attract customers who enjoy the process of browsing for books.

“People actually like to go in a bookstore – there will always be a place for them,” he said.